Goldman Sachs Invested in This Hot Data Center Startup

Goldman is looking for profits among those in the other 99%.Photograph by Getty Images

It takes a lot of technology working behind the scenes for Goldman Sachs to ensure that trades are going through and customer cash is being properly accounted for.

That’s partly why the banking giant invests so much in technology, with Goldman Sachs (GS) President and COO Gary Cohn recently saying that he considers one third of employees as “technologists.”

On Tuesday, data center infrastructure startup Diamanti said it closed a $12.5 million funding round that included backing from Goldman Sachs along with Charles River Ventures, Draper Fisher Jurvetson, and GSR Ventures.

The startup’s founders are all business technology veterans who previously worked at companies like Cisco and data storage company Veritas. Diamanti CEO Jeff Chou has worked at Cisco (CSCO) three times since 1996 in various positions.

“I’ve been through that revolving door,” said Chou. “Cisco and I go back a long way.”

At Diamanti, Chou will be selling a so-called “hyperconverged appliance.” This type of device can be thought of as a kind of all-in-one data center box that contains storage, servers, networking gear, and the necessary software used to manage data center operations.

Fast-rising startups like Nutanix and Simplivity have garnered much attention for their own hyperconverged appliances, which has led to big tech companies like Cisco and Hewlett Packard Enterprise (HPE) creating their own competing products.

Chou said Diamanti stands out from the competition through its own custom software that lets developers and IT operators take advantage of an emerging data center technology called containers. Developers and IT staff are excited about containers because it lets them build and run complex software more easy and efficiently than before, although the technology is still in its infancy as far as mainstream use.

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Goldman Sachs is a big proponent of container technology and has invested in some of the leading startups involved with the technology, including Docker.

Chou said that the bank is using containers for “proof of concept” projects and was interested in Diamanti because of its emphasis on the technology and its call to bring containers to more widespread corporate use.

Still, the startup faces a lot of competition, and Cisco’s own recently announced data center product claims similar container features—although Chou said Diamanti’s product should better attract developers and IT staff that prefer open-source technology.